Adam Answers All Your Questions About the Digitex DAO (DigiDAO)
Check Out More About The Digitex DAO (DigiDAO)
- Digitex Has Been Two Years in the Making - November 27, 2019
- Digitex Futures Is Ready to Revolutionize Futures Betfair Trading - November 26, 2019
- With 4 Days to Go, Check Out the Progress on the Digitex Testnet - November 26, 2019
One of the very first questions that Adam answered was whether it would be better spending our time and resources on launching the exchange before “worrying about becoming a DAO.” We thought about that already! Some of our plans may surprise you, but a great deal of strategy, discussion, and foresight go into every decision we make.
As Adam explains in the AMA, now is the best time to do this. Once we launch the exchange, there’s going to be a lot to do! We’ll be scaling up, catching up, and probably never have the opportunity to pursue this exciting long-term plan for the exchange’s future. Right now, while the exchange is still in development, we can focus on getting the DAO right.
Is Digitex Still Planning on Being a Non-Custodial Exchange?
After the initial announcement on Monday, there was a lot of talk and speculation over whether the DAO meant that we would no longer be a non-custodial exchange. Nothing could be further from the truth. We’re partnering with one of the core teams responsible for working on Ethereum’s scaling solutions, don’t forget! No other company is as committed to the Ethereum blockchain as us.
However, we have to be realistic. As Adam explains, the non-custodial part of the equation is “tricky” and the scaling solutions like Plasma and zkSNARKS aren’t quite there yet. This means that we have decided to launch as a centralized exchange first, and then roll out the non-custodial accounts later.
What About the Security of Users’ Funds?
For those token holders who don’t feel comfortable holding their DGTX tokens on the exchange to receive DiGiDAO, we’re working on a solution.
You won’t be able to earn DiGiDAO tokens by holding your DGTX in your Ledger. However, we do want to allow users to credit their tokens into something like a state-channel based account. This means that they can keep their private keys and benefit from non-custodial storage while still being eligible to participate in the DigiDAO.
We’re working on providing the most robust exchange possible. But we do understand that there are always risks in storing funds on any centralized exchange and people shouldn’t be punished for looking out for the security of their tokens.
There will be more information on this as it is built out, however, we will be using something like a state channel to provide a trustless solution.
Is Digitex Launching on 1st October?
Adam’s announcement on Monday also sparked plenty of rumors about the exchange launching on 1st October. Remember, we’re not giving out any dates this time around. We will let you know the launch date once we hear it from SmartDec. For now, 1st October is the date we will have the DAO up and running, but stay tuned for more updates!
The deposit system will be up and running as we already have that built by our Dublin development team. We’ll explain closer the date how to deposit your DGTX to the exchange. However, we can’t confirm any launch dates just yet.
Will the Smart Contract for Depositing DGTX Be Audited by an External Third Party?
SmartDec is a firm dedicated to auditing smart contracts. However, the fact that they are building our exchange may mean that they seek a third-party to carry out an additional audit if necessary. We’re not 100% sure of the mechanics of this just yet, but given the company’s expertise, we’re confident that everything will be by the book. As Adam says:
“They’ll do this right because they do everything right”
And, of course, the smart contract code will be posted on our GitHub and visible for all to see.
Will the Deposited Tokens Be Providing Liquidity?
This is an interesting question that came up a few times. Will Digitex be using the deposited tokens to make the exchange more liquid? Adam confirms this isn’t really the case. They are still your tokens after all and we won’t be touching them. What he sees happening though is liquidity being generated by default.
The way he sees it is that having DGTX locked on the exchange will make people more likely to use it as their tokens will be easily available. It will encourage users to use the exchange which will, in turn, help liquidity.
Why Take Five Years to Convert to a DAO?
We deliberately designed it like this so that the transition to a DAO is a managed, smooth, and seamless process. As Adam says:
“The DAO will be completely owned and controlled by the DigiDAO token owners. But we don’t want it to be a case of flicking a switch and then it’s a free-for-all. That’s not a good way of doing the transition.”
Staggering the token release enables a phased transition into Digitex becoming a full DAO. But for the first year, the company will remain under Adam’s control and then from the second year onwards, the transition will be in effect. Check the bullet points here for further details on this.
Doesn’t No Commission Mean No Profit?
Some people asked what the point of earning tokens from a non-commission-charging exchange is. But no commission fees doesn’t equal no profit. We’ve never said that we were running a charity here. This is an erroneous idea that some people hold.
The exchange will generate value for its holders in many ways. Say, for example, we have an active exchange with five million Betfair Traders; having an ownership stake in that is extremely valuable! Active Betfair Traders will own the exchange and want the exchange to make money and there are vast opportunities for doing this.
We could charge listing fees for new altcoins and tokens on our spot market. We could run IEOs; there are many ways to generate revenue other than charging commissions.
In fact, Adam believes that it’s not charging commissions that will bring in users! It won’t make an unprofitable exchange, but quite the reverse. DGDAO token holders will have all the ownership and governance rights to a potentially hugely profitable exchange.
Who Qualifies for DigiDAO Tokens?
So, you already know that DGTX holders who keep their tokens on the exchange qualify for DiGiDAO tokens. But Adam also reassures Betfair Traders that tokens in open position will also qualify. After all, he points out, why would we discourage people from Betfair Trading and using the exchange? That’s the last thing we want to do!
Will the early access 1000 DGTX balances be eligible for DGDAO Tokens? Yes, they certainly will.
Moreover, DGTX will still be the utility token and lifeblood of the exchange. Profits, losses, margins, etc. will all be in DGTX. The DigiDAO doesn’t take value from the exchange, it adds value into the mix by allowing token holders to participate in ownership.
The DGDAO token will take over all governance rights of the exchange and this includes decisions on token issuance. This means that DGTX can become a pure utility token, as it offers no ownership or votation rights.
Is There a Legal Framework for the New Company Structure?
Yes. The current company documents state Adam as the owner but we will issue new documents stating that the owners are the holders of the one billion DigiDAO tokens. The legal framework will exist so the holders will legally own the exchange.
When Is Adam Back in Moscow?
Adam confirmed that he’ll be back in Moscow in four days. From that point onwards, he’ll be working with the SmartDec guys every day on the exchange build.
In the meantime, we want to collect everyone’s feedback on the DAO to make it as solid as possible and ensure we’re offering something that’s going to work. So, be sure to keep your questions and comments coming and we’ll take them all on board!
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